Cuba's economy.. blog #6

The Cuban state has experienced a growth in demand for wages, social security, and subsidies, imported goods have been shortened,such as food, and other goods. Cubans have to stand in long lines to obtain limited amount of food supplied. Most needed items cannot be obtained with pesos and were obtained only on the black market with U.S. dollars. Inflation resulted because the government kept making more pesos, even though there were almost no goods available. In order to restore the value of the peso, a program was initiated to reduce the excessive amount of money in circulation. Part of this program was that the government increased the prices of many consumer goods and services, and also created a new tax law, and ended subsidies to businesses that were not economically successful. While these changes occurred, it increased the difficulty of daily living for the average Cuban, but the government have gradually restored the value of the peso.
Before 1993, the U.S. dollar, even though illegal, was used widely on the black market to obtain necessary goods for daily survival. In 1993, the dollar was legalized and Casas de Cambio, (houses of exchange) were established to exchange pesos and dollars. Cuba has created a dual system—a dollar economy and a peso economy—that has certain places where pesos can be used and others where the convertible pesos only are accepted. Since 2005 The US dollar stopped circulating in Cuba and now it is exchanged for the Cuban convertible peso. The Cuban pesos have always been very unstable which is very hard for the Cuban people because they get paid very low and the Cuban pesos lose more value every time a change is made in the currency of Cuba.
Since 1993, foreign banks had been allowed to do business in Cuba to supply financial services such as insurance, foreign commercial investments, and savings accounts. In 1997, a new central bank, the Banco Central De Cuba, was created to supervise and regulate Cuba's growing banking sector. The old bank, Banco Nacional De Cuba, had performed both the roles of central bank and state-owned commercial bank, but would now operate only as a commercial bank. Nevertheless, a very narrow sector of the Cuban population requires banking services. Very few people earn enough money to be able to invest or save.
Hope this information is useful for whoever reads it. Hope you learn something from it. I found this information in a research through google.com and a couple of magazines and newspapers.


I know this has nothing to do with macroeconomics but since we are talking about certain countries i would like to add something else about Cuba. Cuba is very well known not only for their cigars and rum but also for their salsa music along with guaguanco, timbales, charanga, bolero, cha cha cha, danzon, and many other types of music that are very famous among Latin people and people who are interested in Spanish music. Also, Cuba is very famous for baseball since they are the best in the world with the most Olympics won, and the most world championships won in baseball way ahead of any other country like Japan, Korea, USA or Puerto Rico and Dominican Republic. Also boxing, which Cubans are the best amateur boxers in the history of boxing with the the highest world championships, and Olympics gold, silver, and bronze medal counts, and volleyball which the females are also the best in the world with the most medals in Olympics and world championships. Below I posted some videos for your entertainment. Again i repeat, i know this has nothing to do with macro but i thought it would be cool for whoever does not know, to find out. Enjoy...

Cuba's economy. Blog #5 The banking system in Cuba and Cuba's monetary system

Cuba's main bank is The central bank of Cuba. The bank's purpose is:
* To issue the national currency and seek for its stability.
* To contribute to the macroeconomic balance and orderly development of the economy.
* To keep custody of the country’s international reserves.
* To propose and implement a monetary policy which allows to attain the economic goals established by the country.
* To ensure normal internal and external payment operations.
* To dictate mandatory regulations.
* To exercise the functions related to the discipline and supervision of the financial institutions and representative offices authorized to establish themselves in the country and of any other entrusted to it by the laws.

As you can see the banking in Cuba is quite different than the banking in basically almost the rest of world. Since the country is a communist the country, the state remains with control of everything. Cuba has eight commercial banks. The people in Cuba don't save money in the bank because it is so controlled by the government that a person could go to jail for many years if this person has a lot of money saved, since the government knows this is not possible because the employees in Cuba get paid very low. These are the eight commercial banks in Cuba:
* Banco de Crédito y Comercio (BANDEC) (Credit Bank)
* Banco Popular de Ahorro (BPA)(Popular savings Bank)
* Banco Financiero Internacional (BFI)(International Financial Bank)
* Banco Internacional de Comercio S.A. (BICSA)(International commerce bank)
* Banco Metropolitano S.A.
Cuba's investment bank is Banco de Inversiones S.A.



This is the credit and commercial bank. Banco de Crédito y Comercio (BANDEC) was created as a commercial bank. It holds a General License granted by the Central Bank of Cuba , which empowers it to carry out universal functions inherent to commercial banking in operations in the national territory and abroad.
BANDEC distributes its services by means of a network of over 200 branches, completely automated, located throughout the whole country. Another way the bank does its distribution is a remote interconnection system, called Virtual-BANDEC, which allows customers to have access to their account and contract other services from their computers without physical presence at the bank.

The monetary system of Cuba is a dual-value decimal based system, with the primary unit of Cuban money being called the Peso. There are two separate types of money flowing in Cuba.That is the National Cuban Peso and the Cuban Convertible Peso. The Cuban Convertible Peso, also called the chavito, is used to exchange the dollar for it since the U.S. dollar stopped circulating in Cuba. Cuban citizens are paid their salaries in the Cuban Peso, and it is this money in which goods and foods are traded. The exchange rate between the U.S. dollar and the Cuban Convertible Peso is officially 1 to 1. In Cuban pesos it would be 28 pesos for 1 USD.
The peso lost value due to the United States embargo against Cuba and the suspension of the sugar quota. Cuban money like most communist countries has no currency value outside the country.
I found this information on Google and the Miami herald. I thought this would be an interesting topic since we talked about banks and money in the class. Since the money in Cuba has no value outside the country and Cuba uses another type of money that the USD is converted to, i thought this might interest the person that reads this blog. Economy is Cuba is a very interesting topic from my viewpoint since it is so different from the other countries because everything is controlled by the government. I thought it would also be interesting to talk about the Banks in Cuba, so i hope this information feeds your knowledge a bit.

Cuba's economy. Blog #4 (IT Labor Market)

Cuba has one of the best educated workforces in Latin America. Nevertheless, since the job opportunities are offered by the government, the chances for professionals are only a few.Cuba has the highest educated population in Latin America. 95.7% of Cubans are literate.Cuba has a total of 47 universities and total university enrollment is approximately 112,000 per year.

LABOR MARKET:
Cuba has an active population of 4.5 workers. The labor market is comprised of the following sectors: services and government, 30%; industry, 22%; agriculture, 20%; commerce, 11%; construction, 10%; and transportation and communications, 7%. High-tech workers are included in the services and government category. Approximately 170,000 Cubans are self-employed. Since the 1980's the rate of university enrollment went down since the salaries are very low and the jobs and employees are chosen by the government making the chances for success very hard for the people.

INCOME AND PURCHASING POWER:
The salaries in Cuba are very poor which is the major reason why studying has gone down a bit. The professionals in Cuba make a very small amount of money monthly which is very sad.Monthly salaries in state-run positions range from 150-200 pesos for secretaries and laborers to 300-425 pesos for engineering and medical professionals. Government-sponsored pensions range from 120-190 pesos per month. Currently, 30 pesos equate to $1 USD.

To give an indication of purchasing power, consider the following price listing at a Havana farmers market:

1 pound rice: 15 pesos
1 bunch carrots: 10 pesos
1 pound black bean: 20 pesos
1 pound pork: 32 pesos
1 turkey: 300 pesos
1 chicken: 120 pesos

IT LABOR SUPPLY AND DEMAND
Cuba's largest IT programs are at ISPAJE and the University of Habana, which are creating a larger IT graduate base to rise the Cuban economy. More than 18,000 students have graduated from computer science and computer engineering programs. However,the Cuban high-tech industry currently employs only 6,000 workers.

The Cuban government's attitude towards information and lack of Internet access are a constraint. Currently, the Cuban government invests 1.17% of GDP to technological research and development. IT professionals are increasing, with a rate of 1.8 scientists and engineers per 1,000 citizens, 47 universities, and over 200 research and development centers. However, IT training is restricted by the technology currently in use. Much of Cuban connectivity is based on the X.25 protocol, which is outdated and poorly suited to IP traffic. Technological training will likely shift when more capital is available.

There is limited access to hardware and information in Cuba. IT professionals must contend with 2,400 bps data transfers and constant redialing to make connections. Cuban technicians cannot go online and download the latest version of software or hardware and very few have access to technical books or industry journals .

Since Cuba is not a nation enriched in IT such as the United States or other higher-income nations, the focus of Cuban IT is still on programming and not on other areas such as training or hardware development. Cuban IT professionals continue to meet the country's technical needs, but with antiquated IT infrastructure and poor anti-piracy laws, few IT professionals are flocking to the software development industry.

Currently because of the communism in Cuba a lot of the people who want to study, usually think about it twice because they figure that their chances to succeed are higher by working with the tourists that visit the country that actually graduating from an university because their salary is going to be miserable while when working with tourists in resorts or restaurants they will make in a weekend more than they will make in a month of salary working on a career.

Without Castro in the power and Cuba becoming a democratic country, i think that Cuba would be one of the most successful countries in America. There is a lot of smart people and hardworking. The rate of immigration right now in Cuba is 1.54 person per 100 citizens. Cuba could be a country with one of the best economies if it became a democratic country.

Found this information on Google, and a Magazine called Rebelde.

Cuba's economy.. blog #3

In Cuba the businesses and employees are controlled by the government. No one is able to own his own business because everything belongs to the government. Even the employees that are chosen to work at anywhere, they are chosen by the government. Cuba's inflation rate is....(consumer price)
Year
2003- 7.10 %
2004- 4.10 %
2005- 3.10 %
2006- 7.00 %
2007- 5.00 %
2008- 3.10 %
2009- 3.40 %

Cuba has suffered major hits and economy downs since the fall of the Soviet which were Cuba's major supplier. Ever since Cuba has not been able to recuperate completely from that big economy fall it suffered in 1989. From 2000 on Venezuela has been Cuba's major supplier, mostly supplying petroleum and oil to Cuba. Cuba has paid portion of the money and the rest has been paid by Cuba sending about 30,000 professional doctors to Venezuela. Also, since the fall of the Soviet Union Cuba's unemployment rate went up. Many sugar cane centrals were closed and the value of the dollar went up from 20 pesos a dollar up to 150 pesos per dollar. The crisis since 1989 has been tragic for the people in Cuba.In those times the unemployment rate in Cuba wet up to about 21%.
This is Cuba's most current unemployment rate...
Year
2003- 4.10 %
2004- 2.60 %
2005- 1.90 %
2006- 1.90 %
2007- 1.90 %
2008- 1.80 %
2009- 1.60 %
Cuba reached its full employment condition, when registering a rate of 2,6% in 2004 and of 1,9 % in January, 2005. Cuba have slowly been kind of recovering little by little from the economy fall in 1989. The economy of Cuba still need a lot of work to build up and the open trade with its closest neighbor U.S.A is very necessary, but until an agreement is reached then there probably wont be much change in Cuba's economy. Spain, Venezuela, and Canada are still Cuba's top trading partners but since the system in Cuba is so controlled by the government and the people that live in the country is not able to own anything or to have a freedom, United States have not wanted to reach an understanding with Cuba's communist president, Fidel Castro.

Cuba is still making its money based on tourism, cigars, crops and fish. The economy of the country could be better is the sugar cane centrals would open again.
I think that Cuba's economy could be better if Castro decided to make the country a free country and open it to everybody in the world. People would visit Cuba and would be able to enjoy its natural beauty and resources. People from United States would be able to visit and enjoy nice vacations there. Their rum could exported here, the cigars also, sweet potatoes and all the other crops that Cuba produces. Cuba's economy would boost up and the people would actually be able to study and become something and they would also be able to own businesses and invest money and create employments and so on.

I found this information on Google, the Miami herald, Cuban newspapers, and magazines.



GDP (purchasing power parity)
$108.2 billion (2008 est.)
$103.7 billion (2007 est.)
$96.67 billion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate)
$54.71 billion (2008 est.)

GDP - real growth rate
4.3% (2008 est.)
7.3% (2007 est.)
12.1% (2006 est.)

GDP - composition by sector
agriculture: 4.4%
industry: 22.8%
services: 72.8% (2008 est.)
Population below poverty line

NA%
Labor force
4.962 million
note: state sector 78%, non-state sector 22% (2008 est.)

Labor force - by occupation
agriculture: 20%
industry: 19.4%
services: 60.6% (2005)